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From Resource, March 2006
Copyright by LOMA
Hot Technologies for Insurers
Companies that implement effective technology solutions can gain a competitive
advantage in today’s environment.
Industry
analysts say the stakes have
never been higher for insurance companies
to reduce costs and improve efficiency. According to Christopher
Formant, executive vice president, Global
Financial Services, BearingPoint, “Several factors are converging on the
industry, including the opening of new markets around the world, the formation
of an emerging middle class in
Asia
and the aging of Western populations, which increase the need for more diverse
insurance products. Those insurers who can deliver products to market faster
through advanced technology and delivery will be in a position to win big.”
The
proper use of technology can enhance a company’s competitive position. Many
industry suppliers have resources to help companies understand key issues and
help them implement effective technology. Here are examples of what some
solution providers and analysts say about technology:
Business
Rules Engines Alone Are Not Enough
EDS
Solcorp
According
to Eduardo Alzamora, Portfolio
Management Director Product Strategy, EDS SOLCORP, “the widespread adoption of
business rules engines (BREs) is revolutionizing our industry. In essence, BREs
are software applications that manage business rules and separate them from the
application code. Business rules (such as regulations and product features) are
constantly changing in our industry; therefore, BREs enable rules to be
dynamically changed without having to go to IT to change application code every
time,” says Alzamora.
“Business
rules engines are not enough if you are simply exchanging programming for coding
low level business rules. As the number and complexity of business rules
increase, the time and cost savings normally associated with BREs can diminish
as traditional coding is replaced with “XML coding.” This especially holds
true for complex applications such as Policy Administration Systems (PAS).
“Fortunately,
this is where another emerging technology comes to the rescue: Model-Driven
Architectures (MDAs). This approach to software
development enables the separation of business and application logic (in the
form of abstract models) from the underlying technology that implements it. In
turn, business logic/rules can be
optimized and easily modified at a higher level of model
abstraction (versus “XML coding” of many low level business rules). Because
models are platform independent, their potential for reuse is virtually
unlimited and when the PAS engine can interpret the models and associated
business rules without the need for generating code, then the business models
remain in sync with your systems. The application of an interpretive MDA to PAS
development ensures the value proposition of BREs holds true as complexity and
volume of business rules increase. PAS solutions using interpretive MDAs will
enable the development of truly adaptive systems,” concludes Alzamora.For more
on EDS Solcorp, visit www.solcorp.com.
Bring
Top Technologies Together
NaviSys
John
Gorman, Executive Vice President, NaviSys, says, “To achieve transformational
change, insurers simply need to bring today’s top technologies together:
The
web, for straight-through processing of
insurance from point of sale through policy issue. An east-coast life insurer
has implemented NaviSys Enterprise Platform®, speeding products to
market and enabling producers and home office personnel to work from the same
electronic page.
A
mature rules engine that recognizes the
complexities of the insurance business. One of the largest insurance companies
in the
U.S.
is implementing an end-to-end new business process for individual life
insurance. The NaviSys solution captures application data, automates case
management and risk assessment—and is enabling the consolidation of ten legacy
systems into one.
Web
services and ACORD standards,
for seamless exchange of information with sales channels and service providers. Several of NaviSys’ mid-market customers distribute and
underwrite life insurance far more effectively than most tier-one
carriers.
Service-oriented
architecture for
maximum agility.”
“NaviSys’
long list of innovations includes the first J2EE rules-driven-platform for
end-to-end processing of life insurance and the first web-based application and
point-of-sale underwriting system. NaviSys also played a key role in defining
initial ACORD standards. Today, our highly scalable, proven systems are creating
the standard for the industry,” Gorman says. See
the NavSsys web site, www.
navisys.com
Common
Calculation Architecture
AdminServer
Richard
Yeni, Director of Sales for AdminServer, says, “At the end of the day, every
insurer has the same goal when it comes to their data and
calculations—consistent results through their policy life cycle; ensuring that
calculations are in sync for Illustrations, Re-Illustrations, Policy Pages,
Anniversary Statements and Inforce Illustrations. This nirvana of a
single-source for enterprise-wide calculations has been an elusive goal – that
is, until AdminServer’s Common Calculation Architecture.
“AdminServer’s
Common Calculation Architecture allows universal processing rules to be shared
by any ‘consuming’ applications and lets them dynamically apply their own
twists. And it is able to deliver this consistency of calculations across the
enterprise by using widely accepted messaging techniques and standard ACORD data
exchange formats.
“Not
only is consistency in calculations critical to the day-to-day business, but
given all the latest compliance issues from 7702 and 7702a to Sarbanes-Oxley,
consistency in process, data integrity, and maintenance of tight internal audit
controls have become necessities of doing business.
“In
addition to the obvious benefits of accurate and consistent calculations,
AdminServer’s Common Calculation Architecture employs AdminServer’s proven
rules-engine, enabling business rules to be re-used by all systems, resulting in
consistency in process as well as an ability to define and deploy new products
to market in a fraction of the time required by traditional methods,” Yeni
says. Visit AdminServer at www.adminserver.com.
Resolve
Your Systems Concerns This Year
L
IDP
If
you’re like most carriers, for the last several years you’ve been struggling
with the same systems issues for the past few years, says Keith F. Guard,
Director of Sales, LIDP. “Your existing systems are complex, inflexible, and
entrenched. You can’t sell more insurance until you can implement new
products. You can’t implement new products because your systems can’t
process them. You can’t replace your problem systems because the integration
costs are prohibitive.”
“Sound
familiar? You’re not alone. But fortunately, over the past several years,
carriers and vendors have come together like never before, because it’s time
for all of this to stop, for good.
“Thanks
to innovative data and messaging standards by ACORD, a nonprofit standards
organization, systems are talking today. These standards have been created,
refined, and approved by ACORD member companies—carriers who inherently
understand the business, and the vendors who proudly serve them. The ACORD
standards are fast achieving what our industry has needed for a long time—an
industry language for systems.
“At
LIDP, our solutions are flexible, ACORD compliant, and ready to run in a
service-oriented environment. So if you’re faced with systems challenges, we
look forward to the opportunity to help you move to the environment that you
need.”
Contact: Keith F. Guard, Director of Sales, LIDP Consulting, Inc., Phone
630.829.7100, guarke@lidp.com
Underwriting
Technology
RGA Technology Partners
Jym
Barnes, Managing Director, RGA Technology Partners says, “In underwriting,
most of the technology thus far has been aimed at reducing the time it takes to
process an application. Much of it has also been directed toward effective
tracking, getting the best data from the applicant, and automating workflow
requirements, such as testing and correspondence. Our own product, AURA®, does
all of this very well, and integrates effectively into any environment. But just
getting faster doesn’t answer management’s needs to learn and then adapt
their products and processes.”
“We
think the next natural step is to use the technology to capture and analyze
Management Information (MI) data. Every movement of an application, every
decision, every item of data is now filed in a database and accessible to
management. The AURA MI Dashboard makes it very easy for anyone within the
organization to customize and automate reporting on crucial data, allowing
insurers to learn and adapt quickly. Instead of fighting fires, organizations
can learn how to prevent them. After all, insurers’ competitiveness relies
upon their abilities to inform themselves and act accordingly. We believe that
MI tracking, combined with effective reporting may be the item with the greatest
long-term value in the organization.” Contact RGA at 866-832-3931.
Finding
a Competitive Advantage
McCamish Systems
“Carriers
are constantly fighting for shelf space with their distribution partners, and
those that are able to overcome obstacles for contracting, appointing and paying
their producers have a competitive advantage,” says Alan Katzman, Vice
President of Producer Services for McCamish Systems. “To respond to this
opportunity for our clients, we have shifted the focus of PMACS®
(the Producer Management and Compensation System) and our Producer Services BPO
operation from streamlining data entry to eliminating it.”
Like
everyone else, distributors are drawn to product partners that differentiate
themselves by being responsive, easy to work with and offer value added
services. Insurers that are more transparent to the producer and offer more
information and capability over the web can set themselves apart from the
competition. “My bank immediately reflects an ATM transaction online, allows
me to download my recent activity and lets me apply for a home equity line in a
matter of minutes,” added Katzman. “Shouldn’t insurers be able to show me
my appointment status, allow me to download my commission statement and process
an address change request just as easily? We think so, and PMACS®
helps our clients get there.” See
McCamish at www.Mcamish.com
The
Reinsurance View
TAI
Referring
to reinsurance, John Carroll, President of TAI, says, “ Over the past couple
of years, businesses have been bombarded with investigations and regulations,
and the insurance industry has not escaped scrutiny. Last year most companies
with whom I had spoken were so involved in meeting Sarbanes-Oxley requirements
not much attention was given to software purchases, at least in the back office
operations, like reinsurance administration. In 2006 that trend is changing as
companies are now focused on improved productivity and implementing updated
web-based software solutions. That is why TAI has developed its .NET System for
reinsurance reporting. This intranet application allows access to anyone who has
rights to the server and the appropriate security to access the System, whether
in the office or at a remote location. It also facilitates sending information
to other secure sites. Applications like this web application provide clients
with the competitive advantage to maintain their viability in the
marketplace.” Visit TAI at www.taire.com
Communications
Important
Document Sciences
Evolving
regulations, competitive markets, and incompatible, disparate systems can
challenge an insurer’s ability to retain strong customer and agent
relationships. More than ever, today’s insurers need to respond in real time
with personalized, accurate and compliant customer communications via print,
email and the Web. But for many insurance organizations, customer and regulatory
content is maintained in technology silos, causing duplication and maintenance
nightmares.
“To
remain competitive and improve profitability, it has become increasingly
critical for insurers to consolidate their legacy systems and data,” says
Nasser Barghouti, Chief Technology Officer of Document Sciences Corporation.
“Document production is an area where insurers commonly run multiple systems
to generate policies, statements and letters. This fragmented approach to
document creation often prevents business units from achieving optimal
efficiency and containing operating expenses.” Barghouti explains, “Insurers
can maximize productivity and reduce costs by standardizing the production of
policies, statements and customer correspondence on one document publishing
platform.”
Document
Sciences’ award-winning dynamic content publishing suite, xPression®,
enables insurers to consolidate the creation of all vital customer
communications onto a single, highly flexible, scalable and secure platform.
Built on a J2EE service-oriented architecture, xPression enables seamless
integration with enterprise systems, like ECM, via Java, XML and Web Services,
offering an enterprise solution for creating 21st century customer
communications. See Document Sciences at www.docscience.com
Business
Process Automation
Seen as Important
A
recent study by BearingPoint emphasized the role of technology in improving
efficiency and improving costs. The
study, “How To Create A Platform for the 21st Century Insurance Firm,”
suggests that those insurance companies that have not already implemented
business process automation technology, including straight through processing,
integrated client information systems and service oriented architecture (SOA)
for customer service and administration functions, can improve efficiency by
doing so. The resulting increase in efficiency and productivity can mean greater
capacity and as much as 30% costs savings contributing to overall better
profitability
Other
key trends detected by the study include:
Insurance
companies will act as an information network hub, with agents, banks, and
policyholders as the spokes, able to initiate, or respond independently to
requests.
Business
process automation solutions are the next breakthrough
technology for the Insurance industry.
These solutions will enable automated work assignment, eliminate manual tasks
and unlock productivity through better use of information.
The
customer experience will be a
key differentiator regarding how
insurance and financial products
are sold, delivered and fulfilled.
The
modernization of the large Asian economies will create a new,
multibillion-member middle class.
A key differentiator for insurers’
long term growth will be how they
adapt to the
China
’s market, and
Asia
in general, where, the study said, consumers’ technology sophis-
tication is often beyond hat of Western countries.
According
to Genworth Financial CIO Scott McKay, there is “an entirely new operating
environment being created for insurers, with many not having the technology
capabilities to service this new landscape. The companies that do will be in an
advantageous competitive position.”
“Our
research shows that just by aligning business and IT, you can free up management
to concentrate on customer service, product innovation, sales, marketing,
branding, and corporate strategy,” said Marcel Nickler, global insurance lead
for BearingPoint, based in Zurich. “The potential results can include cost
savings and increasing the speed of bringing new products to market.”
“Insurance
companies need to recognize that this century will be dominated by a handful of
global behemoths that will be able to leverage their technology for massive
information repositories and analysis to better meet their customers’
needs,” said Paul McDonnell, senior vice president and lead of
BearingPoint’s U.S. Insurance segment. “A successful technology platform
must be at the center of this evolution, one that will eliminate internal silos
and allow customers and employees to access needed product information and
business services.”
The
global study was developed in conjunction with Datamonitor plc, a premier
business information company specializing in industry analysis. Datamonitor
conducted the study for BearingPoint in 2005.
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